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Trump Meets with Automakers, Blasts NAFTA

May 14, 2018 0 Comments

On May 11, U.S. President Donald Trump urged automakers to produce more vehicles in the U.S. and attacked the North American Free Trade Agreement; companies urged him to work with California to maintain the nationwide vehicle emissions standards put into place by the Obama administration.

CEOs and senior executives from ten U.S. and foreign automakers met with Trump for about an hour at the White House. After the meeting concluded, two major auto industry groups said in a joint statement that Trump expressed an “openness to a discussion with California on an expedited basis.”

The meeting, which spanned about an hour, focused primarily on NAFTA and other trade issues, with Trump “blasting” the pact with Canada and Mexico.

“We’re renegotiating it now. We’ll see what happens,” said Trump, adding that Canada and Mexico “don’t like to lose the golden goose. … But NAFTA has been a horrible, horrible disaster for this country, and we’ll see if we can make it reasonable.”

NAFTA has been called a “success” by automakers, letting the companies integrate production throughout North America and making production competitive with Asia and Europe. Over the past 20 years NAFTA has been in place, automakers have noted the increase in auto production – and they’re worried changing it too much may lead some companies to move production out of the U.S.

In addition to the heads of the two trade groups, chief executives of General Motors Co., Ford Motor Co., and Fiat Chrysler – along with senior executives from Toyota Motor Co., Volkswagen AG, Hyundai Motor Co., Nissan Motor Co., Honda Motor Co., BMW AG, and Daimler AG – met with Trump on Friday.

“We’re really talking about environmental [controls], CAFE standards, and manufacturing of millions of more cars within the United States,” Trump said at the top of the meeting, referring to the Corporate Average Fuel Economy standards for cars and light trucks.

“We’re importing a lot of cars, and we want a lot of those cars to be made in the United States,” he added, mentioning Michigan, Ohio, Pennsylvania, South Carolina, and North Carolina specifically.

Last week, California and 16 other states sued to block the administration’s efforts to weaken the fuel emission and pollution requirements.

A U.S. Transportation Department proposal, expected to be formally unveiled later in May or sometime in June, would freeze requirements at their 2020 levels through 2026 instead of allowing them to increase.

Automakers hope that the White House and California will be able to reach an agreement when it comes to maintaining the national standards; they’re worried that a “prolonged” legal battle could leave them facing two sets of rules at the state and national level, as well as “extended uncertainty.”

Major automakers are not in support of freezing the fuel efficiency requirements, but they do want new flexibility and rule changes addressing lower gas prices and consumer preference for larger, less fuel-efficient vehicles.

Fiat Chrysler CEO Sergio Marchionne said the automaker is “fully supportive” of Trump’s efforts on the mileage rules, and hoped for “an agreed way forward.” The automaker is shifting production of its Ram pickup from Mexico to Michigan in 2020.

The proposed changes to NAFTA wouldn’t require the automaker to end its production in Mexico, rather “redirecting” its Mexican-built exports to other markets, Marchionne said. He added that he hopes the administration will reach a deal with California, and said that Trump is the “ideal negotiator” to do so.

“Our businessman and self-proclaimed ‘dealmaker’ president should be able to take yes for an answer and help us secure a win-win solution that is well within reach,” said Senator Tom Carper (D-Delaware), noting that automakers want a deal reached with California.

Others present at the meeting Friday included U.S. Trade Representative Robert Lighthizer, Transportation Secretary Elaine Chao, White House economic adviser Larry Kudlow, and Environmental Protection Agency chief Scott Pruitt.

An auto industry source told Reuters that Trump told Chao and Pruitt to continue talks with California to see if a deal could be reached quickly.

Democrats and environmental advocates “plan to challenge the administration’s plans to weaken vehicle rules touted by the Obama administration as one of its biggest actions to combat climate change by reducing planet-warming emissions,” according to Reuters.

In response, the Trump administration plans to argue that freezing the Obama-era rules will lead to cheaper vehicles, boosted sales and employment, and improved safety through faster turnover of older vehicles.

About the Author:

Dave Martinson is a broadcast journalist for DrivingSalesNews. He has a background as a TV News Reporter, Anchor and Producer. He has also worked in Digital Marketing and Human Resources. He received his bachelor’s degree in Communication from Brigham Young University – Idaho. He’s married and originally from the state of Washington. He’s a huge football fan and enjoys the outdoors.